Correlation Between ProShares UltraShort and International Business
Can any of the company-specific risk be diversified away by investing in both ProShares UltraShort and International Business at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining ProShares UltraShort and International Business into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ProShares UltraShort SP500 and International Business Machines, you can compare the effects of market volatilities on ProShares UltraShort and International Business and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in ProShares UltraShort with a short position of International Business. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProShares UltraShort and International Business.
Diversification Opportunities for ProShares UltraShort and International Business
-0.76 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between ProShares and International is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding ProShares UltraShort SP500 and International Business Machine in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on International Business and ProShares UltraShort is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on ProShares UltraShort SP500 are associated (or correlated) with International Business. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of International Business has no effect on the direction of ProShares UltraShort i.e., ProShares UltraShort and International Business go up and down completely randomly.
Pair Corralation between ProShares UltraShort and International Business
Considering the 90-day investment horizon ProShares UltraShort SP500 is expected to generate 1.41 times more return on investment than International Business. However, ProShares UltraShort is 1.41 times more volatile than International Business Machines. It trades about 0.4 of its potential returns per unit of risk. International Business Machines is currently generating about -0.29 per unit of risk. If you would invest 2,488 in ProShares UltraShort SP500 on January 21, 2024 and sell it today you would earn a total of 302.00 from holding ProShares UltraShort SP500 or generate 12.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 91.3% |
| Values | Daily Returns |
ProShares UltraShort SP500 vs. International Business Machine
Performance |
| Timeline |
| ProShares UltraShort |
| International Business |
ProShares UltraShort and International Business Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ProShares UltraShort and International Business
The main advantage of trading using opposite ProShares UltraShort and International Business positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ProShares UltraShort position performs unexpectedly, International Business can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in International Business will offset losses from the drop in International Business' long position.| ProShares UltraShort vs. ProShares Ultra SP500 | ProShares UltraShort vs. HUMANA INC | ProShares UltraShort vs. Aquagold International | ProShares UltraShort vs. Thrivent High Yield |
| International Business vs. Information Services Group | International Business vs. Home Bancorp | International Business vs. CRA International | International Business vs. Aquagold International |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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